Paradise Foods opens at The Cove, Tiburon

Paradise Foods has recently opened at The Cove Shopping Center in Tiburon.  More than four years after the old DeLano's Market closed it's doors the residents of 94920 have finally been rewarded for their patience.  The store is light and airy, with Paradise Foods' characteristic hardwood floors, nicely-presented displays, and very smart checkout staff.

As with the other locations, expect to see most of the action around the deli counter and the excellent range of pre-prepared foods, including the great entrees that are made in the kitchen.  This store also has a burrito bar.

Confirmed: Fresh & Easy's owners will sell and exit

Fresh & Easy, the West Coast US small-format market, is to be sold.  As expected, the store's British owners, supermarket giant Tesco, have decided to cut their losses and exit the US.  An announcement today on the store's website stated:

As many of you have heard or read today, our parent company Tesco updated on the future of Fresh & Easy.  While we don’t yet know who our new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business.  We appreciate all the support and love we’ve received from our loyal customers and even though our parent company plans to leave the US, we’re pleased to confirm there are no plans to close any portion of Fresh & Easy.

Fresh & Easy had bad luck from the start, launching the operations in southern California, Arizona and Nevada just as these areas were being impacted by the housing crisis and recession. .  As they aggressively rolled out the concept, they made poor real estate decisions that resulted in store locations in the wrong areas for their target demographic. The concept was different from their competitors, but not in a way that appealed to customers. The use of self-checkouts and the heavy reliance on obscure or home brands were not popular with US shoppers.

The chain had just begun its expansion into the Bay Area when it announced its review of operations last year.  Plans for its first Marin store at the Cove Shopping Center in Tiburon were hastily abandoned (the site is now to be occupied by local operator Paradise Foods).

Fresh & Easy to Open at The Cove Tiburon

It has been a long time coming, but at last a new tenant has signed up for the space vacated by DeLano's at The Cove Shopping Center in Tiburon. And it's a new grocer for Marin, too.  Fresh & Easy is the US offshoot of British supermarket giant Tesco, and has been steadily opening stores and spreading across California and beyond for the last five years.


The Marin IJ asked the obvious question of whether the retailer was thinking of pursuing any other Marin locations:

In addition to the Tiburon site, Fresh & Easy is pursuing a former DeLano's site in the Mission district of San Francisco, one of five Bay Area DeLano's stores — including Tiburon and Tamalpais Valley — that closed in late 2010. Wonnacott would not confirm whether the company is interested in the Tamalpais Valley site. "We're looking at other sites in Marin County but nothing specific to speak of at this point," he said. "Any time something becomes available and it's in an area we'd like to get a store in, we'll take a look at it," he added.

With Peets approved to open in the old Blockbuster store, the future suddenly looks a lot better for Sweet Things, Hearts & Flowers and the other tenants at the center who have had to survive the last couple of years without an anchor store.

Peets eyes Tiburon for new store, while CVS pushes forward

Peets Coffee and Tea has received planning approval for a new store in the Cove Shopping Center in Tiburon. The coffee shop will take the space previously occupied by Blockbuster. Retailers at the local shopping center have been struggling since the departure of first DeLano's market and then Blockbuster video earlier this year.

While Peets will draw a lot more traffic to the center, the news is double-edged for Sweet Things bakery, which has a robust coffee business, and Hearts and Flowers, which also sells coffee. As reported in the IJ:

Marsha Laske, who has co-owned Sweet Things for nearly 35 years, said coffee represents about 15 percent of her business, but she worries Peet's could also cut into her sales of baked goods. "I would not think it would be so good for either of us, quite frankly, when you have a very small population in a very small area where you have two businesses that are almost identical," Laske said.

Meanwhile, in downtown Tiburon, the new CVS drug store is moving forward, though not without ruffling the feathers of a few local residents, who are objecting to the store's large illuminated sign. As reported in the Ark:

More than 125 Belvedere and Tiburon residents have signed a petition demanding that CVS/pharmacy not be allowed to have a large, illuminated plastic marquee sign above the store.
The online petition drive was launched by Marcia McGovern of Belvedere, who earlier expressed her ire over the town's decision to allow CVS to remove the row of mature stone pine trees along their Beach Road and Tiburon Boulevard frontage.
"A 21-foot-long and 3-foot-high illuminated, red plastic, 'marquee' sign … is not in keeping with the small-town character and charm of Tiburon and should not be allowed," her petition language reads.

Disgruntled residents aside, the town of Tiburon can't wait to get these new stores up and open. Tiburon has by far the poorest performing retail sector in Marin County, with sales tax revenues down 38% since 2008.

Waiting for a tenant at the Cove Shopping Center in Tiburon

With both DeLano's and Blockbuster now gone, the Cove Shopping Center in Tiburon is looking somewhat deserted these days. Meanwhile, the small stores at the center are holding on, waiting for things to improve.

I'm sure it's only a matter of time before one the region's expanding markets, such as Sunflower Farmers Market, or Fresh 'n Easy,  leases the grocery store.

DeLanos vacates downtown Tiburon

Following the announcement of the closure of the DeLano market in downtown Tiburon, the burning question is what is going to happen to the vacated space. Does the DeLanos exit, which was as a result of weak sales, signal that there just isn’t enough of a customer base to support a supermarket? Or is this a potential opportunity for an operator that is more in tune with local residents' needs?

There’s no doubt that DeLanos was a poor performer. There were never more than a handful of customers in the store whenever I went in there. And driving by I always noted plenty of empty space in the car park. Comments from locals had the same theme: nice staff but average selection of merchandise and high prices. Customers appeared to use the store for top-up shopping – picking up a few items in between their weekly shopping expeditions to Safeway or Costco. The store always came off second best in comparison with the adjacent Boardwalk Market, which is also expensive, but wins on quality and selection of merchandise.

Adding interest to the story is the situation at the Boardwalk Market, with plans announced last year to kick out the current tenant in 2010, renovate the space and install the operator of Kentfield’s highly-rated Woodland Market. Barring any signed agreements or contracts, Woodlands must surely be considering now whether they should take the DeLanos space instead. That would leave the Boardwalk in place as an established competitor, which is a risk. But alternatively, if Woodlands does not take the DeLanos space, it leaves open the possibility that another quality operator will. Adding spice is the fact that both the Boardwalk and the DeLanos site are owned by the Zelinski family, which also owns most of downtown Tiburon .

The main questions that an operator looking at the DeLanos space will have to ask is whether the local market is big enough to support my store, and can I grab market share from the competition and hold onto it. In terms of market size, Tiburon is certainly big enough. There are approximately 11,000 people in Tiburon/Belvedere. Average household incomes are amongst the highest in the nation, at close to $300,000. Spending on food to take home is estimated at over $10,000 per household, so with 4,700 households there is approximately $50 million of retail sales available for supermarkets and other food stores. A 20,000 square foot market making sales of $600 per square foot, or $12 million per annum would make a tidy profit. That equates to a market share of 24% ($12 million out of $50 million), which is definitely achievable for a good operator.

In terms of competition, Safeway at Strawberry is the main player. The store is not in Tiburon, but everyone passes it on the way in and out of the peninsula. The Boardwalk has no doubt some loyal customers, but it isn’t that great and will lose sales to a top tier operator located directly across the street. DeLanos at The Cove is a minor player.

The taker of the DeLano box also needs to think about the competitive risk in the shape of new players entering the market, most directly in the shape of Woodlands opening at the Boardwalk in 2012, plus Whole Foods at the Alma Center in Mill Valley, which is easily accessible for Tiburon folks. To a lesser extent, Trader Joes will pull some Tiburon shoppers to its new store at Larkspur.

Current market conditions dictate that nothing is likely to happen immediately. In better times I would not be surprised to see a strong Bay Area operator such as Draegers of San Mateo seizing an opportunity like this to enter the affluent Marin market. But it does not have to be an “up-market” operator. Rich people can be notoriously cheap. A value player such as Fresh & Easy would do just as well. Unfortunately, although largely unheard of in the region, it would not take people long to work out that Fresh & Easy is a chain retailer, which makes it about as welcome in the community as a uranium reprocessing facility.

Watch this space.

The Cove Shopping Center

The Cove is a neighborhood shopping center located just to the east of Strawberry, where Tiburon Boulevard meets Blacfkield Drive. The location is well-placed for serving the surrounding residential suburbs and also for capturing trade from passing traffic going to and from Tiburon.
Anchoring the center is a nicely-presented DeLano's IGA supermarket of approximately 22,000 square feet, which took over the space from Bell Markets at the end of 2006. In addition, some 12-13 specialty shops form a U-shape around the car park.
Many of the stores at the center are well-established local favorites. Sweet Things cafe and bakery, which also has an attached homewares store, makes the best cakes in the County. Foodniks is a more recent addition to the center, having taken over the old Let's Eat deli, and offering fresh deli items and pre-made gourmet meals.
Bud's ice cream parlour and Blockbuster are the other stores on the south side of the center.
On the north side, Milano's restaurant is a well-loved local institution and always does good business. The attached wine bar is also great for a quiet drink. Also on the north side is Champagne salon & day spa, a frame shop and a physical therapist.
The eastern side of the center includes Hearts & Flowers, which is a cafe/florist, Blinds & Designs, a dry cleaner and UPS store.

When I lived in this neighborhood I really appreciated having the Cove as my local retail center. For a small center, it packs in a lot - including the everyday essentials and treats for special occasions.